Stacey Leeke – Legal Insighthttp://insight.thomsonreuters.com.au
Best practice & trends for legal professionalsTue, 15 Aug 2017 01:53:20 +0000en-UShourly1https://wordpress.org/?v=4.6.6Is your law firm ready for the big data revolution?http://insight.thomsonreuters.com.au/big-data-revolution/
http://insight.thomsonreuters.com.au/big-data-revolution/#respondThu, 20 Oct 2016 03:22:05 +0000http://insight.thomsonreuters.com.au/?p=4504Read more...]]>In many sectors of the global economy, big data is proving a useful tool for businesses to leverage data analytics in order to tailor their offerings to audiences and gain an edge over the competition. The growing availability of digital data in the legal sphere means law firms are now cashing in on this ‘Moneyball’ approach to decision-making. In this article, we consider how big data can help your firm revolutionise its operations, improve business growth and enhance your client service strategies.

The potential of big data

Law firms are under more pressure than ever before to increase efficiency, enhance productivity and stand out from the competition in order to survive. Increasingly, they face making more complex strategic decisions on growing their business, while delivering explicit value to their clients. And this is where big data can help.

Big data offers law firms the opportunity to look at parts of the business with an empirical approach, and its widespread use in other sectors has proven that a switch to a data-driven approach is the next logical step.

It’s worth noting that big data analytics is not new in Australia. Companies such as Woolworths for example, invested millions into big data in a bid to better analyse the online and in-store spending habits of its consumers. Meanwhile, telecommunications giant Telstra has been building its analytics assets for over four years, and is using big data to drive improvements in its customer service.

Lawyers generate an enormous amount of data on a daily basis – think precedents, advice, correspondence, court judgments and evidence discovery. As more firms digitise information and create (and store) documents electronically, such raw data is now available in copious amounts. Firms that harness and use it correctly can extract meaningful insights to improve productivity, stay ahead of the curve and make better business decisions on the whole.

So how can big data be utilised by firms effectively?

Optimising internal efficiency and driving strategic business growth

Analysing the chunk of raw information sitting on your servers can help you understand what’s really going on in your business. With the right algorithms, firms can transform internal data into insights on practice operations, which may reveal opportunities to increase savings and efficiency. For example, historical data showing patterns around time spent on similar cases can help lawyers plan their schedules ahead of time, or forecast how much revenue can be brought in for the month if they are billing by the hour.

Similarly, external data can be analysed to identify areas of market growth and consumer spending behaviours to enable more profitable decisions regarding business strategy. For example, by understanding how potential clients interact with the business (i.e. through certain devices or at different times of the day), you can tailor your marketing messaging in a way that is more likely to hit the mark and obtain conversions.

Pricing

With the push for alternative fee arrangements, it has become increasingly important for firms to be able to assess the viability of a variety of pricing options. Software tools are now available to pull historic data from your billing systems to perform side-by-side comparisons of various pricing arrangements, assess the impact of adjusting variables and run hypothetical pricing models against upcoming jobs. With such tools, firms can pitch for work and put specific job proposals to clients with confidence in their profitability.

Predicting case prospects and profitability

Algorithms and data-driven searches can be employed to scrutinise thousands of previous cases and assess the prospects and estimated costs of taking on a particular matter. They can even provide insights on how to argue the case and optimise litigation strategies.

An even more powerful application is when big data is used with artificial intelligence (AI). How so? As data sets become too large to deal with effectively, AI (formed by complex algorithms and cognitive computing technology) can help analyse and make sense of huge chunks of information quickly, saving lawyers infinite hours.

International law firm Pinsent Masons has recently placed their matter management in the hands of a program that reportedly employs the use of big data, assisted by artificial intelligence (AI) “to provide more consistent, accurate and quicker outcomes”.

The technology can “disaggregate” large matters and import data and precedents from a knowledge bank to assist users to prepare different components of the case. It is employed routinely on contract risk reviews, litigation, project management and property matters.

To date, we have really only seen the genesis of big data in the legal sector. However, there is no doubt that it has a place in the future of practice management, and the legal sector is bound to see many more innovative applications in coming years.

Lawyers are all too familiar with accusations of padding bills and charging for trivialities in six-minute increments. According to a Law Society paper, the latter was once defined to make accounting practices easier, but has aroused controversy, angered clients and been negatively portrayed in the media as the hallmark of the greedy lawyer.

The billing process is a major factor that impacts a client’s overall level of satisfaction with their legal services. Not knowing how much their legal services will ultimately cost can add considerable stress to a client’s experience.

This is where flat fee and packaged legal services can be successfully used by firms to appeal to the new generation of discerning consumers. By providing more transparency, trust and confidence, legal services can be dramatically improved, promoting client satisfaction, repeat business and referrals.

Flat fee is the simplest alternative bill structure that firms can implement, and there are compelling advantages for making the switch.

1. Work quality becomes the focus of the engagement

Time-based billing creates a personal conflict between the lawyer’s interests and those of the client. The less efficient the lawyer, the higher the costs – and the less value the client receives.

Flat fees align the lawyer’s interests with their client’s, and alleviate concerns over how much time is being spent on a matter. The sole incentive for lawyers is to complete the legal work to the best of their ability. This promotes higher-quality outcomes and efficiency.

2.Fee disputes with clients are minimised

According to its 2014-15 annual report, the Legal Services Commissioner of New South Wales found that 21 per cent of the 7,328 complaints it received were about legal costs. 13 per cent of these complaints included some grievance about overcharging.

Flat fees avoid this situation by eliminating the element of surprise and reducing tension in the client–solicitor relationship. Fee amounts that are established prior to the work being undertaken enable the client to prepare for the bill.

3.Liability risk is reduced

Since the scope of a flat-fee retainer is (or should be) precisely delineated, there is no question about the tasks the lawyer has agreed to undertake. This can reduce professional liability in circumstances where a client alleges their lawyer should have taken certain additional steps that were outside the scope of work.

A properly specified retainer can also enable lawyers to withdraw from acting for a client more efficiently if they refuse to pay for a specific component of the service.

4. Lawyers can focus on being lawyers

Lawyers aren’t university educated to sell time – they learn to solve legal problems. Time-based billing is a stressful and time-consuming addition to a lawyer’s already hectic schedule, which can be overcome with flat-fee billing.

Fixed rates liberate fee earners from the pressures of achieving billable targets and determining whether they are under or overcharging clients (both of which lead to unfavourable outcomes). It means that non-billable time spent poring over pre-bills, narrating time entries and fielding fee disputes can be invested in productive legal work. It can also enhance employee job satisfaction, wellbeing and resilience.

5. Firms can gain a competitive advantage

Despite the modest rise in alternative billing models, many Australian firms have yet to move away from traditional fee structuring. This presents a prime opportunity for firms looking to distinguish their brand as a fresh, modern alternative to the norm by offering flat fee or packaged legal services.

General manager Simon Kahil of Bespoke, a law firm who has successfully implemented fixed fee billing states that there are many factors in favour of fixed pricing, including instilling trust and confidence in their clients.

Giving clients the peace of mind that comes with transparency and price certainly shows you are sensitive to their needs, and this can attract the next generation of value-conscious clients.

How sole practitioners and small firms can implement flat-fee billing

Making flat-fee billing a success largely means two things: changing the way the firm manages its finances and learning how to price your flat fees correctly.

One tool that can assist in both of these areas is the right software. Invest in practice management solutions that can help you streamline your firm’s billing. You can then use historical data to effectively price and quote flat-fee work.

Making the change to a new fee structure is not without its challenges. But firms that understand the benefits – and are willing to implement it – can offer something more to their clients.

]]>http://insight.thomsonreuters.com.au/flat-fee-billing/feed/06 golden rules of migrating your firm to the cloudhttp://insight.thomsonreuters.com.au/migrating-to-the-cloud/
http://insight.thomsonreuters.com.au/migrating-to-the-cloud/#respondMon, 15 Aug 2016 05:51:03 +0000http://insight.thomsonreuters.com.au/?p=4228Read more...]]>The use of cloud technology (like Gmail, Dropbox and Evernote) is already inherent in the daily lives of legal professionals. As technology continues to improve legal business, your firm will need to address the issue of migrating legacy systems over to newer platforms in order to stay current.

Like all other implementation plans, a migration project requires more than just considering costs or looking for vendors. This short guide explains the key factors that your firm needs to consider when implementing a cloud migration plan to help ensure a smoother shift with minimal risks.

1. Evaluate what needs to move and what can stay

Migration to the cloud is all about prioritising, so firstly take the time to see what data really needs to be moved. Critical information that needs to be accessed all of the time should be prioritised, and can include client contact details, documents associated with billing and invoicing, legal schedules, and legal documents and forms.

Having a clear understanding of what goals your firm is trying to achieve with migration can also shape how it occurs. If the migration is applied to only a portion of the firm as a start, realistic timelines and clear metrics in place can help measure success and offer learnings for later on.

2. Choose the right cloud solutions provider

When choosing providers for your firm’s hosting or cloud software needs, avoid spreading the migration strategy across too many platforms or you risk complicating things even further. However, choosing the right software can make things a lot simpler.

Legal data is extremely sensitive and data security is one of the largest concerns surrounding cloud adoption in business. It’s therefore important to choose software or providers that offer security features such as encrypted storage, sound backup policies or the ability to restrict access if needed.

4. Establish good governance over the migration project

In any migration project, good governance is critical for success. Ensure the relevant stakeholders are aware of the risks involved, and that all processes and protocols are clearly communicated.

A migration iteration runbook – or a set of predefined procedures – can help ensure everyone involved understands all activities pertaining to the project. And all processes should be documented in case things go awry.

5. Avoid disrupting everyday operations

Technological changes can risk disrupting your firm’s day-to-day operations. Consider the sensitivities and timeliness of implementation, and how it could impact the daily goings-on at your firm. Often, IT implementations take place after office hours or on weekends to avoid interference with client matters.

Consider whether the migration is best deployed in gradual, incremental stages to ensure there is minimal disruption, and also ensure that enough time is allocated for full implementation, including all required testing.

6. Implement firm-wide training sessions

All newly implemented technology and protocols require some settling-in time. Your firm can encourage swifter adoption by implementing a firm-wide training program, which should be offered to all of your staff members who are likely to use the technology at some point.

A training session can help familiarise your employees with any changes, and can also bring to light issues from a user’s perspective, which can then be promptly rectified.

Keep in mind that migration to new technology is meant to improve the business, whether by saving money or lowering risks. It should also be noted that migrating doesn’t have to be an all-or-nothing move. Implementing one, whether to the cloud or otherwise, may present a few challenges, but can be a highly beneficial move for law firms.

]]>http://insight.thomsonreuters.com.au/migrating-to-the-cloud/feed/0Your checklist for the perfect client estimatehttp://insight.thomsonreuters.com.au/client-estimate-checklist/
http://insight.thomsonreuters.com.au/client-estimate-checklist/#respondWed, 08 Jun 2016 01:37:24 +0000http://insight.thomsonreuters.com.au/?p=3922Read more...]]>Savvy clients are increasingly seeking more predictability and transparency in billing, requiring firms to brush up on their costing skills. But beyond that, fee earners and firms can also benefit from using estimates as a cost management tool.

Lawyers look unfavourably upon fee estimates and generally dislike discussing fees. Quote too high and you risk losing a deal; quote too low and you might be left with an unhappy client forking out more than they expected at the end of the day.

But are estimates the real problem? Many lawyers may argue it is impossible – especially in litigious matters – to predict the endless variables that can affect a final bill. However, consumer cost disputes may not necessarily be about the fees themselves, but inadequate solicitor-client communication regarding them.

An estimate itself may be difficult and at times require adjustments due to unexpected complications, however when done skilfully it can promote better client relations than not providing one.

In fact, there are several benefits derived from nurturing accurate fee estimation skills in your lawyers:

Better realisation rates: Clients who are given an estimate at the start are better able to prepare payment after the case is over. If the final bill is close to the initial estimate, chances are the client will be able to make payment quicker, resulting in higher recovery rates.

Organisation: The analytical breakdown process used to estimate a project helps lawyers take a systematic approach to complex matters, schedule workloads effectively and manage their time.

Transparency: Solicitors are required by law to disclose any chargeable fees or to clients in writing if the costs are estimated to be above $750. Those who are hesitant to discuss costs (no matter how small) risk being perceived by clients as inexperienced or untrustworthy. Being upfront with fee information instils trust and confidence in clients, especially when their final bill does not come as a surprise.

Here are some tips for formulating accurate costs estimates.

Stick to a methodical system

Having a methodical process for formulating estimates ensures consistent and accurate results, enhances the estimator’s confidence in their abilities and reduces stress involved.

Segment the work

Breaking down a matter into smaller components not only provides a truer indication of fees, but it also enables a client to gain more insight into what is involved in their matter. To make this an easier task, create a range of matter templates that provide a task breakdown for typical matters.

Gather vital information

Make the most of an initial client interview to gain as much information as possible about circumstances that may affect costing. Drawing up a checklist of typical stages for that particular legal transaction or task may be useful as a guide.

Use historical data

Develop a database of historical data on average hours required to complete typical major tasks and sub-tasks. This can be used by lawyers to gauge how much time will be required for each step in a new matter.

Assess risk factors

Formulate a list of potential risk factors that are likely to impact fees, such as self-represented litigants or inexperienced counsel on the other side, foreign jurisdictions, multiple clients or other circumstances that may complicate the matter.

Discuss your estimate

Discussing estimates shows that you recognise costs are important to the client and are key to managing expectations. If unexpected events require a revision of the estimates, ensure the clients are aware of the changes made.

Use a legal practice management solution

Not only can using a legal practice management solution assist fee earners in managing client billing more efficiently, it can help keep track of billable time spent on similar tasks in the past, allowing you to prepare an accurate estimate for future work of an equivalent nature.

We’ve created a handy checklist from the above points featuring everything you need to cover when producing the perfect client estimate. Download your free copy here.

To minimise fee disputes due to ambiguity, ensure that an agreement to the cost of work is put in writing. Lawyers should also sit down with clients and explain what a list of common legal terms mean, or include a page of legal terms and definitions as an appendix to the estimate.

As clients gain more bargaining power over legal service providers, firms will notice increasing pressure to provide accurate fee estimates and transparency in their pricing.

Firms that want to set themselves apart from their peers should take the time now to develop good costing skills. This will promote trust and confidence in client relationships and fortify future profitability.

]]>http://insight.thomsonreuters.com.au/client-estimate-checklist/feed/0To merge or not to merge: the key challenges merged firms facehttp://insight.thomsonreuters.com.au/merged-firms-challenges/
http://insight.thomsonreuters.com.au/merged-firms-challenges/#respondTue, 31 May 2016 23:00:39 +0000http://insight.thomsonreuters.com.au/?p=3821Read more...]]>Record numbers of US and UK giants ‘tied the knot’ with Australian firms in 2015, and some of that growth is expected to spill over into 2016. However, a recent study indicates many firm mergers have not delivered the benefits anticipated. So what challenges do they face? And what lessons can be learnt?

The Australian legal market became hot property following the GFC, with our resources, boom-backed economy and geographical and commercial proximity to Asia presenting attractive offerings to US and European markets. The flurry of mergers that followed threw firms and the industry into a state of flux, with partners playing musical chairs and clients squeezing prices even further.

But how have the mergers themselves fared? Gulland Padfield’s study reveals that, in reality, many firms faced a common cluster of post-merger issues, and failure to adequately handle these challenges culminated in negative outcomes for both the firms and their clients.

What were the top three reasons mergers underdelivered?

1. Insufficient focus on delivering client value post-merge

Many firms that merged due to a lack of clear direction in the market continue to struggle. This is because post-merger success is directly proportional to the extent to which merging firms can agree on and plan how they will most effectively capitalise on their new joint client pool. Servicing existing clients must be a priority.

2. Operational integration issues

Venturis Consulting Group advises that failing to develop a “systematic and comprehensive approach” to the integration of processes and systems well before the merge takes place is a serious mistake and will adversely impact business performance.

The technology platforms and needs of an individual firm will be different from a merged firm. Therefore, principals do well to invest in a legal know-how solution, which can offer mergers an integrated system that allows the combined firm to be truly globalised, with up-to-date precedents and practical legal resources, folder and document sharing, and significant reductions in the time it takes senior lawyers and partners to train junior staff.

3. Failure to realise a common vision and clashing firm cultures

Each firm has its own culture and governance style, which may clash with that of a prospective suitor, especially when that suitor is foreign. Tim Shacklock of Norton Rose Fulbright recalls of their merge: “Fundamentally it’s about culture – we were getting married,” he says. “Cultural challenges and [finding] common objectives […] are the most important aspects of the merger.”

Both management teams must, with sufficient clarity, identify the true strategic reasons behind the merger and how these align with the new business strategy.

An intensely competitive legal market, combined with a diminishing mining sector and devalued currency, are creating a decreasingly hospitable environment for global firms. Evidence of this includes news that Skadden will close its Australian office and two of the three founding partners of Chang, Pistilli & Simmons that merged with Clifford Chance will be departing the brand.

While firms should not rule out the prospect of a merger, they should give careful consideration to their reasons for wanting to merge, and ensure they agree on a thoroughly researched post-merger strategy that prioritises the interests of their clients.

]]>http://insight.thomsonreuters.com.au/merged-firms-challenges/feed/0How to future-proof your firm in the NewLaw revolutionhttp://insight.thomsonreuters.com.au/newlaw-revolution/
http://insight.thomsonreuters.com.au/newlaw-revolution/#respondTue, 17 May 2016 03:59:28 +0000http://insight.thomsonreuters.com.au/?p=3749Read more...]]>Firms are stepping beyond the dogma of traditional legal service delivery, lawyers are carving out new flexible career opportunities and clients are getting cost certainty and transparency. But how is NewLaw affecting the rest of the industry? And what can firms do to remain competitive in a volatile legal market?

The Australian legal industry is now a buyer’s market, and clients wield significant power to dictate how they want their legal services delivered and for how much. This has driven a wave of innovation as firms venture outside the proverbial square of bricks, mortar and billable hours. A secondary push has come from senior lawyers looking for flexible solutions.

John Tuck of Corrs Chambers Westgarth, which launched the legal resourcing business Orbit, says: “More lawyers want to balance their personal and career goals and many are looking for new ways of working. They want to work at the top of their field but they also want more opportunity to pursue other interests.”

Where we were seeing only a few small-scale attempts at alternative legal models a few years ago, the market is now flooded with NewLaw players experimenting with different models, blending technology with process-driven solutions and alternative pricing strategies to the point where it is causing notable market disruption.

Mid to large firms are finding it difficult to match competitors who provide the same high-quality services at a lower price. Therefore, many are proactively launching rival business offerings incorporating lawyer placement services, virtual firm models, online document retailing and dispersed firm models where lawyers in effect work as a collection of sole practitioners. What’s more, anecdotal evidence suggests that such hybrids are delivering what they promise.

“The demand for flexibility works both ways,” says Richard Punt, CEO of Peerpoint. “Our clients are looking for flexible solutions to engage high-calibre legal talent, and senior lawyers are increasingly looking for diversity and flexibility in the terms of their engagement.”

Similarly, Tuck says: “Increasingly, our clients want access to high-calibre lawyers who can work with their teams on a flexible basis. Orbit lawyers will have the capacity to resource critical and day-to-day projects and provide flexibility to businesses in managing their legal teams and their costs.”

How can firms remain competitive amid the NewLaw revolution?

While clients will almost always be fixed on the bottom line, the key to a successful firm of the future is flexibility and variety. Whether you are jumping on the NewLaw bandwagon or not, here are a few tips to succeed in future-proofing your firm.

1. Listen to your clients and your lawyers

Change must come from the right motivation, and that is giving your clients what they want and keeping your talented practitioners happy (don’t assume you know what matters most to your employees). Then get creative working around those priority parameters. Designing a NewLaw firm is not about shaping a novel yet rigid framework around your client and lawyer needs. It’s about creating a fluid and flexible model that will continue to bow and flex with these needs as they change.

2. Invest in the right resources

Anchor your flexible model with a comprehensive and reliable legal knowledge product. Many models involve lawyers working off-site at a client’s office, a remote location or the lawyer’s own office in a dispersed situation. Access to thorough, up-to-date, practical legal resources is fundamental to the level of quality they can produce and the efficiency with which they can do it.

Consider investing in a legal know-how solution, which can provide relevant content in the most practical format to enable practitioners to comprehend the applicable law and apply it to the task at hand, be that advising, drafting or transacting.

3. Be authentic

Whatever model or strategy your firm chooses to adopt, it must translate into a fundamental change to your business, not simply a facade. There is enough choice now that clients will go elsewhere if they realise you are dishing up the same thing with a different name.

The NewLaw revolution will progress at a steady pace over coming years, and traditional firms will need to make adjustments to remain price-competitive. However, firms that view it as an opportunity to innovate will thrive in the changing market.

]]>http://insight.thomsonreuters.com.au/newlaw-revolution/feed/05 simple ways to improve practice managementhttp://insight.thomsonreuters.com.au/improve-practice-management/
http://insight.thomsonreuters.com.au/improve-practice-management/#respondTue, 10 May 2016 05:14:28 +0000http://insight.thomsonreuters.com.au/?p=3715Read more...]]>It’s no secret that good practice management is the key to a happy, strong and profitable firm. However, poor habits and shortcuts can, over time, make inroads into best practice, culminating in lower profits, higher risk and stressed employees. If this sounds like your firm, these five steps can help get things back on track.

1. Cut unnecessary costs

Unnecessary spending represents profits that could be going in your pocket but currently are not. Actively monitoring expenditure over a given period is a good way to reveal areas in which spending can be reduced or eliminated altogether.

Solution: Avoid targeting one particular area or practice group. Take a methodical approach to examining the expenses of each department within the firm. Be balanced! Making an expense examination for the first time need not result in a rampage of budgetary restrictions that prevent employees from doing their jobs properly. Ensure any cost cuts are sustainable in the long run.

2. Optimise fee estimates with on-hand data

One reason many firms resist the transition to fixed-fee billing is that they may underquote projects and lose out on fees. Similarly, a leading cause of client dissatisfaction is being billed heavily in excess of the initial quote. The solution? Learn to price jobs accurately.

Solution: The basis of a good pricing plan is understanding what the matter involves, the level of fee earner required to do it and how long it will take. Rather than relying on recollections of the last time a similar type of transaction was handled, take the time to review hard data on previous client rates, time spent and how close you came to delivering on your estimate. This allows fee earners to be more confident about their estimates and hit the mark more often.

3. Manage dates and deadlines effectively

A major cause of professional indemnity claims against lawyers is missed deadlines. In the majority of cases this results from an inadequate diary and reminder system. Failing to properly manage dates and scheduling places a firm at high risk of liability due to the possibility of pleadings or appeals not being filed within the prescribed time, expiration of a limitation period or inadvertent contractual breaches where time is of the essence.

Solution: Employ an electronic diary system with automated alerts that’s accessible to all staff, and maintain a database that’s dedicated to tracking key dates. In addition, consider using workflow software that requires fee earners to check off a step as it is completed and warns them if it is not completed by a certain date.

4. Manage client funds appropriately

Due to trust accounting requirements, a client’s cheque can often take a convoluted path through a law firm’s accounting books. Therefore, keeping good clerical and billing records is vital both to ensure compliance with legal professional rules and to create fee transparency for clients.

Taking care of the first four tips can be hard work to keep track of if your firm is still working off non-integrated paper based systems.

Solution: Make practice management easier by using a comprehensive practice management solution to automate your processes. This can enable your firm to operate more efficiently and profitably, manage risk and comply effortlessly with your professional and accounting responsibilities.

Consistency is the key to making best practice stick, so remember that commitment and regular reviews of your practice management procedures can go a long way in making your firm both a wise choice for clients and a great workplace for employees.

]]>http://insight.thomsonreuters.com.au/improve-practice-management/feed/04 tips to improve your realisation rateshttp://insight.thomsonreuters.com.au/improve-profit-realisation-rates/
http://insight.thomsonreuters.com.au/improve-profit-realisation-rates/#respondTue, 03 May 2016 05:52:43 +0000http://insight.thomsonreuters.com.au/?p=3683Read more...]]>In a perfect world, every moment we spend on a matter would be billed and paid promptly in full. However, due to a variety of factors this is most often not the case. Large or small, law firms face the same challenges in terms of realising the full extent of their profits. So how do successful firms manage to keep their realisation rates at an acceptable level? And how can your firm maximise its realisation?

While in theory, 100 per cent of billed time should make its way into your pocket, inefficiency, client demand for discounts and freebies, scope creep and unpaid invoices all negatively impact realisation, causing profit leak.

Realisation has little to do with the extent of your marketing efforts to bring in work. Rather, it gauges the operational efficiency of a firm, assisting partners and managers to better understand what they are getting back from their hours worked, where too many write-offs are occurring and how to price projects appropriately.

So what can firms do to maximise profit realisation?

1. Monitor practice group and fee-earner realisation rates

Most firms can access extensive profitability metric data through their practice management or accounting software. Make it a goal to review realisation rates for each team once a month in order to identify where improvements can be made. Ideally, firms should maintain a minimum of 85 per cent realisation. Figures below this usually indicate excessive write-offs or a high fee debt.

2. Improve operational efficiency

Consider using a know-how legal resourcing solution to enable fee earners to upskill their knowledge in an unfamiliar area of law and draft documents quicker than ever before, maximising their billable output. Such a resource can also improve the autonomy of junior staff to research and advise clients themselves, freeing up higher fee earners to focus on their own file load.

3. Train fee earners on project management

Partners and associates need to be skilled at pricing, negotiating with clients and adhering strictly to the scope of work quoted. Hold regular training sessions for senior fee earners on these project management techniques. In addition, gather, analyse and make available data on previous engagements to assist in quoting future matters.

4. Examine your collections

Your firm’s ability to collect what it has billed to a client is quite often a measure of that client’s satisfaction with your product or how that product is presented on the bill. Make no mistake: clients do not equate effort with value. Consultant John Chisholm insightfully observed: “Your clients don’t buy time from you. They never have and they never will.” Rather, clients associate value with intellectual capital, and what they expect depends to a large degree on how well the fee earner communicated the scope of work, approach and pricing structure at the outset.

Firms that work smarter instead of harder not only maximise their profits but also demonstrate that they value their employees’ time. Consistently training fee earners to optimise their operational efficiency will enhance their value as assets to the firm, building a stronger and more profitable business.

]]>http://insight.thomsonreuters.com.au/improve-profit-realisation-rates/feed/0The top trends that shaped the legal sector in 2015http://insight.thomsonreuters.com.au/top-2015-legal-sector-trends/
http://insight.thomsonreuters.com.au/top-2015-legal-sector-trends/#respondSun, 29 Nov 2015 22:00:20 +0000http://insight.thomsonreuters.com.au/?p=3226Read more...]]>As we approach the end of another year, we examine what key industry trends shaped the legal sector in 2015 and what we can expect in the year to come.

The year 2015 has seen the pace of the legal industry continue to accelerate, with increased use of technology and alternative business models in response to client demand for more value for money. In turn, competition has been stirred up and firms have clambered to differentiate themselves in the market.

Both the forces that drove change and the products of those changes have become dominant forces in our industry in 2015, and they suggest an interesting road map for the next year.

Trends of 2015

1. Practising rules head toward national uniform framework

Legislative change brought us one step closer to achieving a national uniform regulatory scheme for Australian lawyers, with New South Wales and Victoria unified under a homogeneous framework of practising rules. The new rules saw prohibitions on legal advertising abolished, client disclosure requirements reduced, better protections instituted for firms against consumer claims and consumer dispute resolution procedures enhanced.

2. Price certainty is on the up

The State of the Legal Market whitepaper shows that firms responded to the demand for price certainty by offering a variety of alternative fee arrangements (AFAs) in 2015 in addition to hourly billing. Also, there appears to be commitment to broadened AFA offerings, as we saw firms invest in legal project management and pricing education to enable their senior practitioners to more accurately estimate project costs.

3. Clients are making deals not war

The anticipated increase in front-end property work, including leasing, commercial transactions, finance structuring and property development projects was realised this year. As the whitepaper shows, the demand for merger and acquisition work went up 2.1 per cent while litigation work slowed by 5.8 per cent. Low interest rates, increased market certainty and the fall of the Australian dollar all made Australia an attractive place to invest, enabling front-end to make a comeback in 2015.

4. Firm productivity is improving

Two major movements converged to boost the productivity of lawyers this year. Firms responded to the need to reduce costs and increase profitability by reducing numbers of professional staff. Secondly, the use of time-saving technology in firms increased. Therefore, despite workflow facing a slight downturn, lawyers (particularly those from larger firms) ended up working longer hours.

5. Non-conformers are holding ground

Unconventional law firms made serious inroads into the market this year. In fact, they are now perceived as a legitimate threat by their traditional counterparts as they start to pilfer a healthy share of legal work. This reflects the changing mindsets of both practitioners and consumers toward novel business models in the legal sector.

6. Lawyers are loving social media

Australian lawyers increased their use of social networking sites, such as LinkedIn and Twitter, as a medium to promote their brand, disseminate information and network with clients and colleagues. This reflects the extent to which technology is permeating the industry as a whole, and shows practitioners are adapting to the use of online mediums for professional networking and marketing.

7. The rise of corporate counsel

An emphasis on risk and liability management and a push to tighten their legal spend has seen a shift in the way in-house legal teams are utilised. Companies are performing increasing amounts of commercial work internally and corporate counsel have become key consultants within companies, not just on legal issues but also major business decisions. As a result, the type of work farmed out to private firms has changed and budgets have tightened.

So what can we expect in 2016?

Industry experts predict that the general steady decline in demand for legal work we saw in 2015 will continue into the new year, further intensifying the already competitive climate. Firms will need to continue to stand out, and there will be no room for below-standard legal services. They will also face increased pressure from clients to contain pricing and provide more for less, requiring practices to maintain a tight rein on their operating budget in order to remain profitable.

What we’ve seen in 2015 demonstrates that the majority of firm principals recognise that the legal profession is moving on from the days of antiquated systems, traditions and boys’ clubs into an exciting era of new technologies, business models and delivery methods.

As we move into 2016, firms wanting to stand out must stay on top of developing trends and ensure they remain at the forefront of market changes.

]]>http://insight.thomsonreuters.com.au/top-2015-legal-sector-trends/feed/0Why you need sharp legal knowledge (and how to maintain it)http://insight.thomsonreuters.com.au/sharp-legal-knowledge/
http://insight.thomsonreuters.com.au/sharp-legal-knowledge/#respondMon, 09 Nov 2015 22:30:09 +0000http://insight.thomsonreuters.com.au/?p=3205Read more...]]>Staying up to date with the latest legal developments in a variety of sectors and practice areas can be an overwhelming prospect for many legal professionals, especially those running small firms. But maintaining your sharp edge is vital to delivering the best-quality work to your clients and mitigating your liability risk.

Just as a sharp blade enables a chef to work with precision and speed, lawyers need sharp legal knowledge and up-to-date resources to effectively handle legal problems and carve out the relevant facts and issues to be addressed.

In fact, staying abreast of the latest legal developments in your areas of expertise can:

Save you time: Knowing about a legislative change or a new case before you start formulating your advice enables you to do the work once, with confidence you won’t have to rethink or rewrite it.

Save face: Written advice affords us the luxury of updating ourselves on an unfamiliar area of law so we can still sound like an expert even though we weren’t two hours prior. But what about fielding incidental legal questions at a client lunch? Having a fresh mental cache of new case law can be a deal saver.

Save your reputation: Failing to take into account a changed law can result in negligent advice to your clients, which means having to make that call to your professional liability insurer.

So how should lawyers maintain a sharp legal knowledge?

1. Utilise online technology

Online legal information providers are one of the best sources of legal updates on a broad range of subject areas. These resources can be customised to your specific needs and sent to your mobile device. You can also access experts’ blog posts, podcasts, practice notes, checklists and precedents so you can be confident you’re using the most accurate and up-to-date reference materials.

2. Subscribe to industry newsletters

Industry newsletters provide a wealth of information about legal developments, broad policy changes and market shifts that are directly affecting your clients. Such in-context information can highlight the practical implications of a law or policy change to your client’s business.

There is also a new range of ‘converter’ apps, which can instantly provide you with the new legislative reincarnations of obsolete provisions, such as the former Trade Practices Act.

3. Attend industry networking events

The benefits of getting involved with industry events cannot be emphasised enough. Not only do you receive practical industry information, you also have the opportunity to build your professional profile, learn about your competitors, network with clients and share the learning experience with clients and colleagues.

The opportunities to stay abreast of the law are continually growing, and it’s now easier than ever to access timely and accurate information. Lawyers who invest the time to stay sharp with these tools can gain the trust of their clients and a reputation for quality.